According to the Steven Joyce/Fran O’Sullivan theory of political sharemarket vandalism, Nick Smith has ‘destroyed’ about $260 million dollars worth of wealth in the last ten days. I look forward to their columns/press releases warning of capital flight, skies raining blood etc.

This is a disgrace. The National Government has attacked everyone’s Kiwisaver accounts, destroyed confidence in the sharemarket, signaled a North Korean house-building policy, and spooked international investors with their investigation into Fletcher’s rorting of the building supplies market.

The difference being that the enquiry is aiming to make building materials cheaper by making the market more competitive, not by setting up a central purchaser for building materials and forcing Fletchers to sell to it at a price that the purchaser chooses, and forcing all retailers to buy from the central purchaser.

Dave – obviously the policy issues are different (although the focus of NZ Power is to also reduce costs) – but one of the specific criticisms levelled at Labour/Greens was that they attacked the market and caused a loss of shareholder value.

Before Smith made his announcement – Flectchers was worth $5,940,000,000. It dropped 1.3 per cent on the first day, bounced around for the rest of the week and closed yesterday with a market capitalisation of $5,681,000,000.

Meaning, if you use the same criticism that was levelled at Shearer and Norman – Smith has destroyed $259 million of value and National should never be allowed near the Treasury benches.

That’s being facetious of course, but it mirrors the hysterical overreaction to the Opposition’s announcement.

It would be an issue if the govt lost money from selling share sales – as it did with MRP.

But this wasn’t the main attack line at the time. It was that the Greens/Labour had caused the share value of Contact and TrustPower to fall, thus costing “billions” (thanks, Hooten) in losses to “ordinary Kiwis” who were invested through Kiwisaver, etc. Wonder how much Kiwisaver funds are invested in Fletchers?

It would be an issue if National were deliberately talking down the value of a State asset.

Why? Are you saying that it’s OK for Governments to “talk down” the value of private companies? So that when the Greens/Labour announce that they plan to take action to force supermarket prices down (as Farrar is “convinced” they will, scoff, scoff), you’ll shrug and say “that’s OK”? And, if it is so bad to talk down the value of State assets, what are your views on John Key’s rubbishing of Solid Energy (a “broken company”, no less).

It would be an issue if you were a Fletcher share holder and you thought National were talking down your wealth for political gain.

Why exactly do you think Nick Smith is doing this? Just for the shits and giggles of it all?

The graph isn’t that clear but it doesn’t look like there was any drop in the price in the few days after the announcement.

The point isn’t whether the claim is true. It’s whether it can be deployed as an attack line against a political opponent.

Plus, care to explain why the Securities Commission is the appropriate forum for complaints about Nick Smith, and not for the Labour/Greens announcement? Aside, of course, from the fact that for you Blue does no wrong, while the other colours do.

To be fair to Smith (which I am not always inclined to be) there is a substantial difference between “the price of a thing is different in New Zealand and Australia” to “We’re going to restructure an entire industry for no reason other than political pandering”

care to explain why the Securities Commission is the appropriate forum for complaints about Nick Smith, and not for the Labour/Greens announcement?

I don’t believe SecCom would have any interest in either case. Public statements by politicians aren’t their field.
Unless, of course, an MP bought or sold shares in the lead-up to either announcement. That would be a fascinating piece of investigative journalism.

But given that the company still exists and is still taxpayer owned, why isn’t he damaging any remaining equity in it by his comments (which contrast strongly with those made by the Board’s chair, who is trying to negotiate the company’s future with the banks)?

Oh, yes, sorry … he’s in the blue team. So obviously it’s different. Because it is.

I just meant that if shareholders believe that politicians have manipulated share prices for political gain then they would have a valid complaint.

So – Fletcher’s shareholders do have a valid complaint! Where, then, is the outrage Danyl references in the original post?

given that the company still exists and is still taxpayer owned, why isn’t he damaging any remaining equity in it by his comments

Two reasons:
1) Solid energy is effectively in a ‘frozen’ state while the corporate adviser, KordaMentha reviews the business and assesses the courses of action available.
2) Key isn’t saying anything we don’t already know. He’s not adding uncertainty (which is the biggest killer of value) to the market by saying “yep, it’s not looking good”.

comments (which contrast strongly with those made by the Board’s chair, who is trying to negotiate the company’s future with the banks)

In the very same article:
“Chairman Mark Ford says he has “total confidence” Solid Energy’s s revamped business plan would be acceptable to the Government and banks. Asked if Ford’s plan was viable, Key yesterday said he hadn’t seen it. “If it is that would be great. That’s not the advice we’ve had just yet.”

So – Fletcher’s shareholders do have a valid complaint! Where, then, is the outrage Danyl references in the original post?

I’ll leave the outrage to the Fletcher shareholders but since this did not happen anyway there might not be any.

However as a kiwi and therefore having shares in the energy companies via the govts I was disconcerted to say the least with what Labour and the Greens got up to which was one big cut off their (and ours) noses to spite their face exercise.

And before you go on about how I’m just on the blue team, can I just say that I supported most of what Cullen did apart from making WFF and student loans too generous to the middle class.

I’ll leave the outrage to the Fletcher shareholders but since this did not happen anyway there might not be any.

So you agree the outrage expressed by various bloggers/political flacks/newspaper columnists on behalf of Contact/TrustPower shareholders was out of place? Thus, you agree with Danyl’s actual post – that the reaction to these two political announcements reveals a partisan discrepancy? Excellent.

I judge you less on what you say about what you believe, and more on what you actually say.

Hi Neil M
Re: “However as a kiwi and therefore having shares in the energy companies via the govts I was disconcerted to say the least with what Labour and the Greens got up to which was one big cut off their (and ours) noses to spite their face exercise.”

Funny that, I was outraged at the govt privitising part of my share in those energy companies, and goof on Labour and Greens for coming up with an alternative to the neo=liberal looting clap trap.

The assets became the domain for entire exploitation when they were sold. Prior to that they had a semblance, however minuscule, of providing a public good to the net benefit of taxpayers.

Secondly, the ‘earmarked or schools’ meme is poppycock. That’s what government operating expenses are for. To put it into perspective, how can a government that borrows hundreds of millions a year to keep universal pensions ticking over, suddenly claim poverty to justify an asset sell off?